Selective expression of dominant negative (DN) peroxisome proliferator-activated receptor gamma (PPARγ) in vascular smooth muscle cells (SMC) results in hypertension, atherosclerosis, and increased NF-κB target gene expression. Mesenteric SMC were cultured from mice designed to conditionally express wild-type (WT) or DN-PPARγ in response to Cre-recombinase to determine how SMC PPARγ regulates expression of NF-κB-target inflammatory genes. SMC-specific overexpression of WT-PPARγ or agonist-induced activation of endogenous PPARγ blunted TNFα-induced NF-κB target gene expression and activity of a NF-κB responsive promoter. TNFα-induced gene expression responses were enhanced by DN-PPARγ in SMC. Although expression of NF-κB p65 was unchanged, nuclear export of p65 was accelerated by WT-PPARγ and prevented by DN-PPARγ in SMC. Leptomycin B, a nuclear export inhibitor, blocked p65 nuclear export and inhibited the anti-inflammatory action of PPARγ. Consistent with a role in facilitating p65 nuclear export, WT-PPARγ co-immunoprecipitated with p65, and WT-PPARγ was also exported from the nucleus after TNFα treatment. Conversely, DN-PPARγ does not bind to p65 and was retained in the nucleus after TNFα treatment. Transgenic mice expressing WT- or DN-PPARγ specifically in SMC (S-WT or S-DN) were bred with mice expressing luciferase controlled by a NF-κB-responsive promoter to assess effects on NF-κB activity in whole tissue. TNFα-induced NF-κB activity was decreased in aorta and carotid artery from S-WT, but was increased in vessels from S-DN mice. We conclude that SMC PPARγ blunts expression of pro-inflammatory genes by inhibition of NF-κB activity through a mechanism promoting nuclear export of p65, which is abolished by DN mutation in PPARγ.